Item 3.02 Unregistered Sales of Equity Securities.
On August 31, 2021, Net Element, Inc. (the "Company") filed a Current Report on
Form 8-K (the "August 31st 8-K") reporting under Item 3.02 the exchanges through
August 31, 2021 of shares of its common stock pursuant to the Master Exchange
Agreement dated as of July 9 2021 (the "Exchange Agreement") with Esousa
Holdings, LLC, a New York limited liability company ("Esousa") in transactions
that were not registered under the Securities Act of 1933, as amended (the
"Securities Act").
After the filing date of the August 31st 8-K through the filing date of this
Current Report on Form 8-K, the Company has exchanged an aggregate of an
additional 500,000 shares of common stock (the "Shares") pursuant to the
Exchange Agreement with ESOUSA in multiple transactions, with the exchange on
September 9, 2021 resulting in the issuance by the Company greater than 5% of
the Company's outstanding common stock exchanged in unregistered transactions
since the filing date of the August 31st 8-K.
The Company received total consideration of $4.7 million for the Shares. The
Shares were issued to Esousa under an exemption from the registration
requirements of the Securities Act in reliance upon Section 3(a)(9) of the
Securities Act.
The Exchange Agreement and its terms were disclosed in our Current Report on
Form 8-K filed on June 12, 2021. Reflecting the issuance of the Shares, as of
the filing date of this Current Report on Form 8-K, the Company had 6,404,716
shares of common stock outstanding.
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